Farfetch: The Reversal Is Likely To Gather Pace

Summary

• Farfetch Limited's stock has rebounded this year, rising 28% aided by strong first-quarter earnings, China's recovery, and the improving market sentiment toward growth stocks.
• Farfetch's two most important markets - the U.S. and China - are well-positioned to see explosive growth in online luxury retail in the long run.
• Although it is too early to predict long-term competitive advantages, the company has done a commendable job of differentiating itself from the competition.
• I have made some changes to my cash flow based valuation model for Farfetch to arrive at an updated intrinsic value estimate.

Shana Novak

Farfetch Limited (FTCH), a leading luxury fashion e-commerce company, has faced significant challenges in the past year, leading to a decline in its market value. These challenges were mainly due to broader economic conditions that affected its growth and caused financial losses. Last

Analyst’s Disclosure:I/we have a beneficial long position in the shares of FTCH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.